"We do have to ask whether this particular turnaround is as a result of the uncertainty of what may happen after October 31 when the UK leaves the EU?"
Mortgage approvals for house purchase increased to 67,300 in July, the highest level seen since July 2017, according to the latest Money and Credit statistics from the Bank of England.
Net mortgage borrowing also picked up in July, rising to £4.6 billion. While this was the strongest since March 2016, the Bank says it reflected a fall in repayments rather than an increase in new lending.
The annual growth rate remained at 3.2%, close to the level seen since 2016.
Richard Pike, sales and marketing director at Phoebus Software, commented: “The Bank of England’s figures this morning confirm what UK Finance member’s statistics reported earlier this week, that July was a good month for the mortgage market. Since then we have also seen the National Association of Estate Agents (NAEA) suggest that the number of house hunters that registered homes for sale in July also rose, whilst the Land Registry data showed that there was a 15.3% increase in the number of new homes sold. This all points to a healthier market than we saw earlier in the year.
“We do have to ask whether this particular turnaround is as a result of the uncertainty of what may happen after October 31 when the UK leaves the EU? It is only natural that people are looking to the future and wondering how the market will fair post-Brexit. If, as some predict, there is a slump and house prices fall immediately after our exit then what we are seeing is homeowners looking to secure the best prices for their property now. However, this could mean a glut of properties coming to market at a time when overall confidence is teetering between ‘keep calm and carry on’ and ‘keep calm and do nothing’.”
Toni Smith, chief operating officer at Primis, added: “Advisers have clearly been doing a stellar job in securing the best possible outcomes for customers and contributing to today’s mortgage approval figures. Planning ahead financially is always going to result in a better result for the end-customer, and it’s great to see that brokers have been able to demonstrate their value to clients in this way.
“However, it’s also important for advisers to remember that their services don’t need to stop at just mortgages; there are many other aspects of financial planning that will help them secure optimal outcomes for clients. Protection, for example, is another area where advisers can demonstrate their value by initiating honest conversations with clients on this topic, and ultimately putting them and their business in good stead for the future.”